Retail sales rise less than expected in November

By IBT Staff Reporter On 12/13/11 AT 9:16 AM

Retail sales rose less than expected in November as a drop in receipts for food and beverages weighed against stronger sales of motor vehicles, tempering some of the expectations of a strong holiday shopping season.

Total retail sales increased 0.2 percent after rising by an upwardly revised 0.6 percent in October, the Commerce Department said on Tuesday.

Strong sales reports over that weekend led some analysts to predict a strong overall season, although economists have warned the shopping frenzy may not carry through the holidays due to the nation's still high unemployment rate of 8.6 percent.

Also, the heavy discounts that brought buyers in also cut into margins. On Tuesday, Best Buy Co's , the world's largest electronics chain, reported a fall in third-quarter profits. Its shares dropped 8 percent in heavy pre-market trading.

U.S. stock index futures pared gains and government debt prices pared losses after the economic data was published.

Federal Reserve policymakers gathered on Tuesday for a meeting that was expected to feature extensive discussion of new transparency steps but not yield any major policy shifts.

A recent string of improved economic data in the United States have eased fears of recession, buying the central bank time to gauge the impact of Europe's debt crisis on the U.S. economy.

Small businesses in the United States grew more confident in the economy's future in November, for a third straight month of improvement, bolstered by a more optimistic outlook for sales and hiring, according to a separate report released on Tuesday.

The National Federation of Independent Business said its Small Business Optimism Index rose 1.8 points to 92.0.

But sales at food and beverage stores fell 0.2 percent in November. Also holding back the overall gain in sales, receipts at gasoline stations dropped 0.1 percent last month after slipping 0.4 percent in October.

Core retail sales, which exclude autos, gasoline and building materials, rose 0.3 percent in November after advancing 0.7 percent the prior month.

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